According to the latest news report by Bloomberg, the world’s second largest cryptocurrency exchange in terms of trading volume, Binance, is looking to lay the groundwork for a new bank that will be wholly owned by cryptocurrency investors.
The new bank, called Founders Bank will be based out of Malta, the island nation that has proved itself to be a crypto-friendly location in terms of transparent and robust cryptocurrency regulations.
Binance revealed to Bloomberg that it has already invested in the bank as an anchor investor, taking a 5% stake in the new project. Other investors include Neufund, the Blockchain based equity fund raising platform. The pre-money valuation of Founders Bank has been set at €133 million (~$155 million).
The founder and Chief Executive Officer of Binance Changpeng Zhao stated that they were very excited to not only be the very first investors in this bank, but were also looking forward seeing the full range of banking services that Founders Bank would eventually offer. He also said that they were very happy with the “vibrant” Blockchain related opportunities opening up in Malta and was looking forward to launching more partnerships there.
The future bank will have systems that are based on Blockchain technology and will issue its own legally binding equity tokens. In fact, one of its backers, Neufund will be the platform that will conduct Founders Bank’s Equity Token Offering (ETO). The ETO will be conducted under German regulations and will partner with one of Europe’s biggest stock exchanges, though the name of the exchange hasn’t yet been revealed.
The ETO has been designed in such as a way that all those who invest in the initial offering will become co-owners of the bank, making Founders Bank the world’s first – and only – decentralized and completely community owned bank. It will also be the only bank to have tokenized ownership.
The bank will be led by its co-founder, Michael Bianchi, who will take on the role of Chairman of the company. The supervisory board and top executives of the company consist of industry experts and have been pulled in from blue chip companies such as Deloitte, the World Bank, OECD, the European Commission, Barclays, Deutsche Bank and JP Morgan Chase & Co. Some of the members of the new team include Dr. Abdalla Kablan, Sonal Kadchha, Paula Pandolfino, Martin Bruncko, Pavel Bodark, Andre Eggert and Jonathan Gowen.
The challenge that Founders Bank face in making this innovative, first of a kind project a reality is getting the necessary permit. Firstly, the bank will need to get regulatory approval from the government of Malta. And considering the pro-crypto attitude the island nation has, this should not be a problem.
In fact, the junior minister for financial services, digital economy and innovation with the Maltese Prime Minister’s Office, Silvio Schembri stated that the island nation was honored to be chosen to be the place where the world’s first global community-owned bank would be established.
Getting regulatory approval from the European Central Bank (ECB) is an entirely different ball-game. According to the global strategist for London-based ADM Investor Services International, Marc Oswald, the concept of the bank is fascinating. The bank would need to get approvals from anti-money laundering regulators. The question is, how will the ECB regulators view this initiative? When contacted, the ECB spokesperson declined to comment on the situation.
This news has come just a week after the Maltese government passed 3 laws that are focused on promoting Blockchain based businesses to invest in the island nation. According to Binance, these laws have created a fertile environment in which the cryptocurrency and Blockchain industry can flourish.